The Evolution and Determinants of Wealth Inequality in the North Atlantic Anglo-Sphere, 1668–2013

152 Pages·2018·3.68 MB·English

by  Livio Di Matteo

THE EVOLUTION AND
DETERMINANTS OF
WEALTH INEQUALITY
IN THE NORTH
ATLANTIC ANGLO-
SPHERE, 1668–2013
Push and Pull
Livio Di Matteo
The Evolution and Determinants of Wealth
Inequality in the North Atlantic
Anglo-Sphere, 1668–2013
Livio Di Matteo
The Evolution and
Determinants of
Wealth Inequality in
the North Atlantic
Anglo-Sphere,
1668–2013
Push and Pull
Livio Di Matteo
Department of Economics
Lakehead University
Thunder Bay, ON, Canada
ISBN 978-3-319-89772-1 ISBN 978-3-319-89773-8 (eBook)
https://doi.org/10.1007/978-3-319-89773-8
Library of Congress Control Number: 2018938196
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To Olivia and Nicholas
The twenty-first century belongs to them.
C
ontents
1 An Unequal World: Introduction to Wealth Inequality
in the North Atlantic Anglosphere 1
2 Wealth Inequality and Its Historical Context 11
3 Wealth Inequality: Facts, Figures and Approaches to Its
Study 25
4 Understanding the Determinants of Wealth Inequality 41
5 Examining the Evidence: Wealth Inequality in the North
Atlantic Anglosphere 67
6 Summary and Concluding Thoughts: The Persistence
of Wealth Inequality 99
Appendices 107
References 129
Index 145
vii
L f
ist of igures
Fig. 4.1 Trade union membership and density in the United Kingdom,
1892–2007. (Source: Guardian Trade Union Database.
https://www. theguardian.com/news/datablog/2010/
apr/30/union-membership-data#data) 50
Fig. 4.2 Trade union membership and density in the United States,
1930–2003. (Source: Mayer (2004: 22–23)) 52
Fig. 4.3 Trade union density in Canada, 1920–2014. (Data Sources:
Riddell (1993) and OECD STAT) 53
Fig. 4.4 A push-pull framework for understanding the evolution of
wealth inequality 55
Fig. 5.1 Gini coefficients of wealth inequality, Canada, 1851–2012 71
Fig. 5.2 Gini coefficients of wealth inequality, United States, 1680–2011 72
Fig. 5.3 Gini coefficients of wealth inequality, United Kingdom,
1688–2010 72
Fig. 5.4 Wealth share (%) of the top 1 percent, Canada 1872–2012 73
Fig. 5.5 Wealth share (%) of the top 1 percent, United States, 1774–2012 73
Fig. 5.6 Wealth share (%) of the top 1 percent, United Kingdom,
1668–2013 74
Fig. 5.7 Wealth share (%) of the top 10 percent, Canada, 1851–2012 74
Fig. 5.8 Wealth share (%) of the top 10 percent, United States,
1774–2012 75
Fig. 5.9 Wealth share (%) of the top 10 percent, United Kingdom,
1668–2013 75
Fig. 5.10 Gini coefficients by country: Canada, the United States, and
the United Kingdom, 1680–2012 79
ix
x LIST OF FIGURES
Fig. 5.11 Gini coefficients by country with separate LOWESS smooth
(bandwidth = 0.5): Canada, the United States, and the United
Kingdom, 1680–2012 80
Fig. 5.12 LOWESS smooth (bandwidth = 0.5) of wealth share (%) of
the top 1 percent: Canada, United States, and United
Kingdom. (Data sources: Same as those for Appendices 1, 2,
and 3 and also Chartbook of Economic Inequality. http://
www.chartbookofeconomicinequality.com/) 81
Fig. 5.13 LOWESS smooth (bandwidth 0.8) of wealth share (%) of top
10 percent for selected countries: 1660–2013. (Data sources:
Author’s data and Roine and Waldenström (2014, 2015) 82
L t
ist of abLes
Table 5.1 Average wealth inequality measures by time period 69
Table 5.2 OLS regression results: unweighted. Dependent variable:
natural log of Gini coefficient and natural log of wealth share
of top 1 and 10 percent 86
Table 5.3 OLS regression results: weighted by population share.
Dependent variable: natural log of Gini coefficient and natural
log of wealth share of top 1 and 10 percent 88
xi
CHAPTER 1
An Unequal World: Introduction to Wealth
Inequality in the North Atlantic Anglosphere
Abstract Economic inequality is a key research area, and the direction of
the relationship between industrialization, economic growth, and eco-
nomic inequality over time is a key question. An examination of wealth
inequality in the north Atlantic Anglosphere countries of Canada, the
United Kingdom, and the United States from 1668 to 2013 finds that the
process of economic growth and industrialization has pushed wealth
inequality upwards while other economic factors have either reinforced
inequality or pulled it down. While wealth inequality is generally high, it
declined over the long term and, unlike income inequality, has not experi-
enced as pronounced a rebound in these or other developed countries
since the mid-twentieth century—with the notable exception of the
United States.
Keywords Wealth • Inequality • Industrialization • Push • Pull
Acknowledgements: The author wishes to thank Daniel Waldenström and Jeffrey
Williamson for their comments on earlier versions of this project. As well,
portions of this project were delivered at conferences and seminars and received
helpful comments. These venues included the Social Sciences History Meetings,
Chicago, November 17–20, 2016, the Seminar Series, University of Economics
(VSE), Prague, October 12, 2016 and the Meetings of the Canadian Economic
Association, Ottawa, June 2–5, 2016.
© The Author(s) 2018 1
L. Di Matteo, The Evolution and Determinants of Wealth
Inequality in the North Atlantic Anglo-Sphere, 1668–2013,
https://doi.org/10.1007/978-3-319-89773-8_1